2010

In the News

How To Buy Corporate Support for Kerry-Lieberman
Chris Horner, Planet Gore, 14 May 2010

Cap-and-Scam
David Harsanyi, Denver Post, 14 May 2010

Renewables Versus Conventional
John Droz, Jr., American Spectator, 14 May 2010

The Bootleggers Are the Baptists’ Last Hope
Iain Murray, Washington Examiner, 13 May 2010

Thomas Friedman, Phone Home
William Yeatman & Jeremy Lott, Real Clear Markets, 12 May 2010

A Climate Dud
Chip Knappenberger, MasterResource.org, 12 May 2010

The Price of Wind
Wall Street Journal editorial, 12 May 2010

Kerry-(Graham)-Lieberman: A Monstrous Payoff To Big Businesses
Myron Ebell, New York Times, 10 May 2010

Shelving of California’s Climate Law a Lot Closer
Tom Tanton, OC Register, 10 May 2010

Sale of Chicago Climate Exchange Reinforces Weak Carbon Market
Joel Kirkland, ClimateWire, 3 May 2010

News You Can Use

Costs & Benefits of Kerry-Lieberman American Power Act

Potential cost: $70 billion to $145 billion a year
Benefit: By 2100, Kerry-Lieberman would reduce global temperatures by .2 degrees Fahrenheit, if the mandatory emissions targets are achieved (and the sensitivity of the climate to CO2 levels is as high as the IPCC claims)

Inside the Beltway

Myron Ebell

EPA Releases “Tailoring Rule”

The EPA released the final version of its “tailoring rule” this week, but it hasn’t been published in the Federal Register yet.  The tailoring rule ignores the clear language of the Clean Air Act that stationary sources that emit more than 250 tons per year of the regulated pollutant must be regulated.  EPA proposes to regulate sources above 75,000 tons of greenhouse gas emissions per year, at least for the first few years. CEI’s Marlo Lewis explains the tailoring rule and its consequences here and here.

At last: Kerry and Lieberman Introduce Their Bill

Senators John Kerry (D-Mass.) and Joseph Lieberman (I-Conn.) on Wednesday finally released a draft energy-rationing bill.  It’s 987 pages.  The text and short and longer summaries may be found here. They boasted that it has wide industry support and have made no secret of the fact that large parts of it were written by the companies that support it.  Several heads of big companies stood with Kerry and Lieberman at their press conference, although BP and Goldman Sachs were not there.

The targets and timetables for reducing greenhouse gas emissions are similar to those in the House-passed Waxman-Markey bill, H. R. 2454, but the methods to achieve those reductions are somewhat different.  Kerry and Lieberman begin their bill with nuclear loan guarantees and offshore oil provisions.  There is a cap-and-trade system, but it applies only to electric utilities.  The price of ration coupons has lower and upper limits.

The bill summary claims that, “Consumers will come out on top.  The American Power Act sends two-thirds of all revenues not dedicated to reducing our nation’s deficit back to consumers from day one.”  I wonder how long that promise will be kept by the Congress.

I don’t think the bill is going anywhere and said so here.  Surprisingly, Senator Lindsey Graham (R-SC), who helped write the bill but pulled out three weeks ago, sent out a press release that makes a similar prediction. Kerry claims, correctly in my view, that it is not an environmental bill.  Rather it is a collection of payoffs to big companies to pass a bill that will put the federal government in charge of controlling how much and what type of energy people can use.

Barrasso Offers Amendment to Ban Carbon Derivatives

Senator John Barrasso (R-Wyoming) this week filed an amendment to the financial regulation bill currently being debated on the Senate floor that would ban trading in carbon derivatives if a mandatory cap-and-trade scheme is enacted.  The text of Senate amendment 3940 may be found here.  Those who want to e-mail their Senators in support of (or opposition to) the amendment may do so at Freedom Action.

Unless Majority Leader Harry Reid (D-Nev.) manages to cut off debate on the financial regulation bill, S. 3217, it is expected that Senator Barrasso will offer his amendment early next week.  It should attract strong support from the left as well as the right.  The purpose of the amendment is to try to limit opportunities for market manipulation and fraud if an artificial market is created by government in carbon credits.  EUROPOL has said that up to 90% of the volume of trades in the European Union’s Emissions Trading Scheme involve fraudulent activity.  That’s not because there is anything wrong with derivatives.  In fact, various derivatives are necessary for the efficient working of markets.  It’s because carbon credits are phony pieces of paper.  Anything that can be done to limit this colossal scam should be done.

Update on Murkowski Resolution

Senator Lisa Murkowski (R-Alaska) is nearing D-Day to bring her resolution disapproving the EPA’s finding that greenhouse gas emissions endanger public health and welfare to the Senate floor for a vote.  I expect her to do so late next week or perhaps early in the week after next.  Under the Congressional Review Act, she needs only fifty-one votes.  The resolution, S. J. Res. 26, has forty-one sponsors, including three Democrats.

As I said last week, I think it’s going to be a very close vote.  Those who want to e-mail their Senators in support of (or opposition to) the Murkowski resolution may do so at Freedom Action.

If the Senate passes the resolution, then the House could take it up at any time.  Clearly, Speaker Nancy Pelosi (D-Calif.) is dead set against allowing a vote on the resolution.  And if the House passed it, then President Obama could veto it.  However, pressure continues to build in the House to do something.  The latest step in that direction is a bill introduced this week by Representatives Dennis Rehberg (R-Mont.) and Stephanie Herseth Sandlin (D-SD), which would prohibit any regulation of greenhouse gases under existing laws.  This is similar to an amendment that Senator George Voinovich (R-Ohio) released a few weeks ago.  The text of H. R. 5924 may be found here.

Rehberg and Herseth Sandlin are reacting to the Bureau of Land Management’s decision last month to suspend oil and gas leases in their States while it considers the effects of more oil and gas production on global warming.  BLM’s action is just the tip of the iceberg, so I expect many more Members of Congress will soon become interested in the Murkowski resolution and the Rehberg-Herseth Sandlin bill.

Around the World

Iain Murray, from The Corner

UK’s New Anti-Energy Policy

The new coalition government in the United Kingdom has made public its list of environmental policies, and it reads like a national charter for economic suicide.  The Rt. Hon. Chris Huhne, MP, a Liberal Democrat on the left of that party, has been made Secretary of State for Energy and Climate Change, although it is quite clear that the order of priority is the reverse of that.  Mr Huhne has been an environmental activist for many years and is therefore unlikely to listen to voices telling him that the lights will go out and energy prices rise if he implements these policies fully.  Meanwhile, the new government’s hostility to air travel is obvious, something that will no doubt dismay Britain’s tourist industry.  The Taxpayers’ Alliance, one of several groups in Britain that understands the implications of these policies, has issued an initial reaction that would be devastating if anyone in the new government was willing to read it.  Unfortunately, the environment section is such a cornerstone of the coalition agreement that it will likely be clung to as long as the coalition has life. Click here to read the agreement in full.

The Cooler Heads Digest is the weekly e-mail publication of the Cooler Heads Coalition. For the latest news and commentary check out the Coalition’s website, www.globalwarming.org.

Today’s Greenwire (subscription required) includes an edited transcript of an interview with Lindsey Graham (R-SC) that recalls Bill Clinton’s famous line, “It all depends on what the meaning of ‘is’ is.”

Graham was at pains to explain his position on the Kerry-Graham-Lieberman cap-and-trade bill. On the one hand, he asserted that, “I’m in this to win.” On the other hand, he pulled the rug out from under Kerry and Lieberman two weeks ago when he backed out at the last minute from a press conference at which the bill was to be unveiled, and he is not expected to join them when they introduce the bill next week. Sen. John Cronyn (R-TX) aptly described Graham as the hokey pokey man: “You put your right foot in. You take your right foot out. I’m not sure where he [Graham] is right now.”

Although the bill includes a cap-and-trade program for the electric power sector, which is to be extended over time to other sectors of the economy, Graham is still asserting that it’s neither a cap-and-trade bill nor a global warming bill. He stated: “It’s not a global warming bill to me. Because global warming as a reason to pass legislation doesn’t exist anymore.” He also explained: “There is no bipartisan support for a cap-and-trade bill based on global warming.”

Permit me to translate Graham’s Clintonese: “We want capntrade even if the original and central rationale is no longer credible, and oh, by the way, we’re not calling it capntrade anymore. I’m in this to win but I’ll be a no-show when Kerry and Lieberman introduce the non-global warming, non-capntrade, global warming-capntrade bill.”

In the interest of ensuring public access to climate-related documents that may be hard to find, I am posting here the original, June 1998 study by technology analyst Mark P. Mills of the sprawling compliance burdens of EPA regulating carbon dioxide (CO2) as an air pollutant under the Clean Air Act (CAA).

The study, entitled A Stunning Regulatory Burden: EPA Designating CO2 As A Pollutant, estimated that applying CAA permitting requirements to CO2 would compel EPA to regulate over 1 million small- and mid-size businesses.

In September 2008, Mills and his daughter Portia updated the study for the Chamber of Commerce in a report entitled A Regulatory Burden: The Compliance Dimension of Regulating CO2 as a Pollutant.

Although superceded by the later report, the June 1998 report remains highly relevant to the climate policy debate.

A Stunning Regulatory Burden was a direct response to the April 1998 Memorandum by then EPA General Counsel Jonathan Z. Cannon asserting EPA’s authority under the Clean Air Act to regulate CO2 and other greenhouse gases (GHGs). Petitioners in Massachusetts v. EPA partly relied on the Cannon memorandum to press their claim that EPA had a statutory obligation to issue an endangerment finding and regulate GHG emissions from new motor vehicles under Sec. 202 of the Act.

Most importantly, the June 1998 Mills study reminds us that EPA had to know all along that a victory for petitioners in Massachusetts v. EPA would dramatically expand its regulatory reach beyond any plausible delegation of regulatory authority from Congress.

Yet during all the years when the case was being litigated (Sep. 2004 – April 2007), EPA never pointed out the regulatory ramifications of a victory for petitioners. Only long after losing case, in its Advanced Notice of Proposed Rulemaking (July 2008) and Tailoring Rule (October 2009), did EPA acknowledge that the endangerment finding tees up the very sorts of regulatory excesses Mills warned about a decade earlier. 

The 5-4 majority in Mass v. EPA decided in favor of petitioners partly in the belief that an endangerment finding would not lead to ”extreme measures” (p. 531). But according to the Tailoring Rule, unless EPA “tailors” — that is, amends — the CAA, the endangerment finding will lead inexorably to a host of “absurd results” that conflict with and undermine congressional intent.  

The question arises: Why didn’t EPA explain this when it really mattered? Why did EPA pull its punches in Mass. v. EPA? Why didn’t EPA make the case that the endangerment finding sought by petitioners would lead a regulatory cascade that Congress never intended and would not approve?

I think the answer is obvious. For EPA, losing the Massachusetts case meant gaining the power to regulate fuel economy for the auto industry and, more importantly, the power to determine climate and energy policy for the nation. Strong circumstantial evidence suggests that EPA wanted to be thrown into the greenhouse briar patch all along.